Inventory of homes on market in Sonoma County drops to 12-year low

The number of single-family homes on the market fell to its lowest level in 12 years last month as buyers vied for a dwindling supply of properties.

"We have seen an inventory crush for quite some time, but especially this year. It's gotten to the point of being drastic," said Rick Laws, vice president of Pacific Union International, which compiles The Press Democrat's monthly housing report.

There were just 679 single-family homes for sale in Sonoma County in November, down 22 percent from October and a 60 percent drop from a year ago.

The last time there were so few homes for sale in November was in 2000, when 597 homes were on the market. By comparison, buyers had 2,597 homes to choose from in late 2007.

"Everybody is out there and scrounging and bidding against each other to get these properties," Laws said, noting that multiple offers are now the norm on appropriately priced homes.

Low interest rates, which have fueled demand, and fewer distressed homes coming onto the market, which has constrained supply, are two reasons for the slim pickings, Laws said.

Most real estate analysts consider the market healthy when there is a four- to six-month supply of homes for sale. Today there is just over a six-week supply.

"It's uncanny how little inventory there is and how huge the demand is right now," said Stephen Liebling, manager of Coldwell Banker in Sebastopol.

People who were priced out of the market during the housing bubble and those afraid of buying as prices plummeted now don't want to miss the rebound, he said.

"There was the perception that we haven't hit bottom yet, and now I think there's more of the perception that we've bounced off the bottom," Liebling said.

There were 407 single-family homes sold in the county last month, a 17.6 percent drop from the previous month, but still up 18 percent since last year. Home sales typically taper off toward the end of the year and pick up again after the holidays.

Buyers purchased 70 condominium units last month, up 43 percent from October. Many of the condo buyers were likely seeking a single-family home, but were unable to find what they wanted or were outbid, Laws speculated. Investors looking for a place to park some cash may have also helped to drive the increase in condo sales, he said.

Prices rose in November. The median climbed to $375,000, up 2 percent from October and 18 percent from a year ago, but remained far below levels from before the market crash. Sonoma County's median price reached a record high of $619,000 in August 2005 before tumbling to $305,000 in February 2009.

The boost in the median price is partly due to significant strength at the higher end of the market, Laws said.

In November, 21 homes sold for more than $1 million, including three that sold for more than $4 million, according to the report.

So far this year there have been a total of 13 sales in the county over $4 million, a segment of the market that had been virtually frozen. There were just four such sales in 2011.

"This is really significant for us," Laws said. "That is not an anomaly."

The mid-range of the market has also shown some life, with sales from $500,000 to $600,000 surging 49 percent this year; those from $600,000 to $700,000 increasing 43 percent; and homes from $700,000 to $800,000 going up 25 percent.

The local sales trends mirrored the resurgence of the Bay Area housing market. Sales across the nine-county Bay Area rose 16 percent compared with a year ago, while the region's median price increased 20.5 percent during the same period to $438,000, according to San Diego-based DataQuick.

It was the highest median price in the Bay Area since August 2008.

"With the mismatch between supply and demand, there's upward pressure on prices," John Walsh, DataQuick president, said in a statement.

You can reach Staff WriterKevin McCallum at 521-5207 or kevin.mccallum@pressdemocrat.com. On Twitter @citybeater